Zhou Feng runs a walnut processing factory in Southwest China’s Yunnan province. The walnut milk from his factory is popular, but he has always been anxious to explore more processed walnut products to lift his business to the next level. Recently, the launch of a new kind of instant coffee offered a new business opportunity for the walnut industry…Full Article: Mar 2018

Key Points

In March 2018, Dehong Hogood Coffee launched a new instant coffee product that contained walnut protein powder instead of non-dairy creamer, which contain trans-fatty acids. According to the Coffee Association of Yunnan, instant coffee accounts for ~70% of China’s total coffee market.

By the end of 2017, Yunnan Province annually produced 1.16 million MTs of walnuts on 2.86 million hectares of land.

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In 2016, China consumed 128,000 MTs of coffee beans. Yunnan Province accounted for 98% of China’s coffee production with ~136,000 MTs harvested on 116,667 hectares of land that year. Approximately 73,000 MTs of this amount was exported.

In November 2016, it was announced that China’s largest instant-coffee factory was being built in Chongqing Municipality. The factory (expected to be completed in 2018) will have an annual production capacity of 10,000 MTs of freeze-dried coffee, 3,000 MTs of roasted/baked coffee beans, and 2,000 MTs of liquid coffee concentrate.

In June 2016, the Chongqing Coffee Exchange was established. According to a representative of Dehong Hogood (Yunnan-based coffee producer) quoted in December 2015, the exchange’s spot transactions will total somewhere between 100,000 MTs and 200,000 MTs in 2016. Dehong Hogood reportedly accounts for roughly 50% of China’s coffee exports.

In March 2015, Nestle China destroyed tons of instant coffee in its Dongguan, Guangdong province, factory due to poor demand. During the same month, construction on the Nescafé Coffee Center (NCC) began and was expected to be completed by October 2015.

In 2013, Yunnan Province produced almost 100,000 MTs of coffee or approximately 98% of China’s total output. Yunnan province has three main coffee growing regions, with Dehong (bordering Burma) and Pu’er (bordering Burma, Laos, and Vietnam) being the most developed. Dehong Hogood Coffee Company is the primary buyer of Dehong coffee while Switzerland’s Nestle is a major purchaser of Pu’er beans (south of Dehong).

Established in 2007 in Yunnan province, Dehong Hogood‘s coffee plantations total 6,667 hectares, comprising approximately one-third of the coffee planting area in China. Hogood produces 30,000 metric tons of coffee berries (primarily Arabica coffee) annually, most of which is exported to Europe and Korea. The company also produces and sells roasted coffee, including whole bean, ground coffee in bags for exporting and instant coffee in fractional bags for retail.

From 2010 to 2012, Shaanxi Province’s walnut production increased from 60,453 MTs to 162,981 MTs. Over the same time period, Shanxi Province’s walnut production increased from 65,156 MTs to 106,772 MTs.